Offshore bank deposits exempted from excise duty

Depositors who park funds in the offshore banking units of their banks will enjoy exemption from excise duty on foreign currency deposits in the coming fiscal year of 2024-25, according to the proposed tax measures.

The government has offered the benefit as banks in the country are working to attract foreign currency holders, particularly non-resident Bangladeshis, to make deposits in their offshore banking units (OBUs).

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The development comes after Bangladesh Bank relaxed the rules and allowed banks to receive funds from OBUs amounting to 40 percent of their regulatory capital to settle payment obligations.

Besides, there will be no change in the excise duty on bank debit or credit balances of up to Tk 10 lakh at any time of the year.

However, the annual excise duty on bank balances of between Tk 10 lakh and Tk 50 lakh in local currency will be Tk 3,000.

Meanwhile, the excise duty on bank accounts having debit or credit balance between Tk 50 lakh and Tk 1 crore was increased to Tk 5,000, showed the budget proposal of the finance ministry.

For bank balances between Tk 1 crore and Tk 5 crore, the National Board of Revenue (NBR) seeks to create two slabs: Tk 1 crore to Tk 2 crore and Tk 2 crore to Tk 5 crore.

As per the proposal, the excise duty will be Tk 10,000 on debit and credit balances of between Tk 1 crore and Tk 2 crore.

For debit or credit balances between Tk 2 crore and Tk 5 crore at any time of the year, the amount of excise duty will increase to Tk 20,000 from Tk 15,000.

However, the NBR seeks to keep the amount of excise duty unchanged for debit or credit balances exceeding Tk 5 crore at any time of the year.